“The modern media company must develop extensive direct-to-consumer relationships. We think pure wholesale business models for media companies will be really tough to sustain over time.” — RANDALL STEPHENSON, AT&T CHAIRMAN-CEO

“If studios want to thrive in the era of Google, Amazon, and Netflix, they are going to have to think differently about communicating with their customers. In order to do that, they are going to have to make gathering and analyzing data on customers a priority.” — MICHAEL D. SMITH and RAHUL TELANG, Streaming, Sharing, Stealing: Big Data and the Future of Entertainment

Netflix (NASDAQ:NFLX) has taught Hollywood one lesson that towers above all the others — that content creators must have a direct line to content consumers.

Today, Variety’s Cynthia Littleton published an excellent indepth look at the changes that Netflix has forced upon Disney (NYSE: DIS), AT&T (NYSE: T), Time-Warner , and Comcast (NASDAQ: CMCSA) among others. Disney is leading the charge with a risky multi-billion dollar initiative that involves pulling its content from Netflix and other outlets (and therefore losing income from carriage fees) while building a Netflix-style platform which will be the exclusive home for it’s hugely popular Marvel franchise, past Disney favorites, and new original content.

Every media company is moving to a D2C model thanks to the technology that allows us to view content when, where, and how we want. When we subscribe to a platform like CBS All-Access, Hulu, Amazon Prime, etc., we agree to give the platform provider permission to collect our viewing data; i.e., which programs we watch, for how long, what we’re searching for, what we stop watching and after how long, etc. There’s no opt-in or opt-out for viewing data. It is a mandatory part of your Terms of Service. If you don’t like it, then don’t subscribe is the position of the company.

Viewing Data Is Gold

If a studio knows what you and millions of others like, they can offset the risk of financing a movie or series that will flop. Marketers will spend more on programs that can deliver their particular demographic. Nielsen (the traditional go-to company for ratings) has failed to deliver results to big brands so often that they fled traditional TV for Facebook and YouTube.

Why?

Viewing data.

Then there are the unions like DGA and SAG-AFTRA. Streaming content is so new that there are no contract provisions for residuals from those programs and no ratings data to negotiate fair salaries with. Just last month SAG-AFTRA sought TV animation strike on the “refusal of employers to provide scale wages or residuals in the fastest-growing area of animated performer’s work — animated programs made for subscription-based streaming platforms like Netflix and Amazon.” No one knows the actual viewing numbers except the platforms and they aren’t sharing.

There have been numerous articles about attempts to crack Netflix’s “black box” of viewer data. One company, Symphony, failed miserably at it. Nielsen is implementing a new technology that Netflix has disputed in terms of accuracy. My company, Reel Cash, has recently launched its own initiative called Reel Pass — a viewer data marketplace where Netflix and YouTube subscribers can get paid for sharing their viewing data using a Chrome browser extension.

Passage of California’s Consumer Privacy Act of 2018 have brought privacy issues to the forefront in spite of huge resistance on the part of Facebook and Google according to the New York Times. One of aspect of subscriber data that isn’t protected under that act, nor under the GDPR, is what you like to watch.